Hepatitis C virus (HCV) is an important and worldwide cause of chronic liver disease, cirrhosis, and hepatocellular carcinoma. HCV is over-represented among veterans, and the VA medical system provides care for the largest population of HCV-infected people in the U.S. Host immune recognition of HCV develops slowly following infection, and CD4+ and CD8+ T cell responses develop weeks to months after infection if they develop at all. After viral persistence is established, HCV-specific CD4+ and CD8+ T cells are readily detected in most infected individuals, yet these T cells are ineffective in controlling viral replication. Although several vral proteins have been shown to interfere with various aspects of the host innate and adaptive immune response, a clear mechanism by which HCV diminishes CD4+ and CD8+ T cell immune responses is lacking. In addition to liver disease, HCV also is responsible for a variety of non- hepatic complications. The pathogenesis of non-hepatic HCV-related diseases may reflect abnormal regulation of host immune responses (e.g. cryoglobulinemia), chronic inflammation and/or decreased immune surveillance (e.g. non-Hodgkins lymphoma [NHL]). Fortunately, antiviral therapy for HCV infection has dramatically improved in the past few years, and the use of combination direct antiviral agents has a great potential for virological cure. However, because HCV treatment may have serious side effects, is expensive, and is not completely effective, it is important to better understand host immune responses to this pathogen for identifying alternative therapeutic targets and to facilitate vaccine development. We provide preliminary data demonstrating that the HCV E2 envelope glycoprotein competitively inhibits T cell signaling through the T cell receptor. Based on work in the most closely related human flavivirus (GB virus C; GBV-C), we hypothesize that E2 protein competes with the key proximal lymphocyte-specific protein tyrosine kinase (Lck) by serving as an alternative substrate for phosphorylation. As a consequence of this interaction, signaling is reduced following T cell receptor engagement, contributing to persistent HCV infection, a decrease in host immune surveillance mechanisms, and resultant increase in the development of altered host immune responses. We further hypothesize that HCV E2 protein and HCV virions modulate immune responses in uninfected bystander cells including lymphocytes. Published work is consistent with HCV infection altering TCR-mediated signaling in vivo, and that HCV proteins blunt proliferation following TCR stimulation in vitro in humans in and mice. Our preliminary work suggests that this may be mediated at least in part by HCV E2 protein, and that the effect on bystander cells involves the transfer of E2 in exosomes to surrounding cells. In this proposal we will characterize the HCV envelope glycoprotein E2 effects on TCR signaling, and confirm the mechanism of the effects on bystander T cells. In addition, we will characterize the constituents of HCV envelope glycoprotein E2 containing exosomes, and in exosomes present in the plasma of HCV-infected subjects. These studies will characterize a novel mechanism of HCV-mediated immunomodulation that is likely to contribute to persistence and may influence non-hepatic HCV- related disease processes. Identification and characterization of this HCV E2 - lymphocyte interaction may contribute to the development of novel therapeutic and/or vaccine approaches to HCV, and potentially to related viruses within the Flaviviridae.